INTANGIBLE ASSETS

As
of June 30, 2017 and December 31, 2016, intangible assets consisted of the following:

June
30, 2017

December
31, 2016

Estimated
Useful Life in Years

GrossCarrying Amount

Accumulated
Amortization

Net

Carrying
Value

GrossCarrying Amount

Accumulated
Amortization

Net

CarryingValue

Amortized
Intangible Assets:

Customer
Relationships

5 to
12

$

8,960,700

$

(1,218,528

)

$

7,742,172

$

8,960,700

$

(780,960

)

$

8,179,740

Trade
Brands and Patent

2 to
8

498,598

(145,757

)

352,841

498,598

(91,061

)

407,537

Dispensary
License

14

10,270,000

(916,965

)

9,353,035

10,270,000

(550,179

)

9,719,821

Total
Amortized Intangible Assets

19,729,298

(2,281,250

)

17,448,048

19,729,298

(1,422,200

)

18,307,098

Unamortized
Intangible Assets:

Trade
Name

Indefinite

5,320,000



5,320,000

5,320,000



5,320,000

Total
Unamortized Intangible Assets

5,320,000



5,320,000

5,320,000



5,320,000

Total
Intangible Assets

$

25,049,298

$

(2,281,250

)

$

22,768,048

$

25,049,298

$

(1,422,200

)

$

23,627,098

Intangible
assets with finite lives are amortized over their estimated useful lives. We recorded amortization expense of $429,525 and $516,878
for the three months ended June 30, 2017 and 2016, respectively, and $859,050 and $527,498 for the six months ended June 30, 2017
and 2016, respectively.